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BMI View: The real estate sector is currently witnessing marginally increasing rental rates due to continued demand and low levels of new developments. Therefore,supply is reducing in relation to demand and the vacancy rate coming down. There is sustained demandfor modern units in all sectors, particularly the retail and industrial sectors bolstered by consumer demand from the young population.Anoverreliance upon the oil sector continues to threaten growth in the country, however,continued efforts to diversify the nation's fiscal interests look to mitigate this somewhat. Such efforts will also prove beneficial to the office and industrial sectors in terms of demand for premises and growth.

We expect the Kuwaiti economy to see modest growth over 2016 and 2017, forecasting real GDP growth of 1.5% and 1.2%, respectively, up from -1.6% in 2015. After a long period of stagnation, the Kuwaiti investment outlook appears to be improving, while the prospects for consumption remain bright. As ever, given the economy's heavy dependence on oil, any further downturn in global energy prices would prove disastrous. That said, Kuwait has the financial arsenal to cope with any short-term volatility in oil prices, and, therefore, the underlying risks in this regard are minimal.

Kuwait City is the capital and largest city of Kuwait. It has a population of 2.1 million in the metropolitan area. Kuwait City is the political, cultural and economic center of Kuwait. Salmiya has undertaken a major face lift in recent times primarily due to ever-expanding commercial real estate on the Gulf Road. The city is a retail focused location with the popular Salem Al-Mubarak Shopping strip home to many of the city's retail outlets. Al-Jahra is a town located 32 kilometres (20 miles) west of Kuwait City. Al Jahra is the capital of the Al Jahra Governorate of Kuwait, as well as the surrounding Al Jahra District, which is agriculturally based

Demand for class A office space is currently good in locations such as Kuwait City, with rental rates rising over the past year as a result. There is a lack of development activity in this real estate sub-sector however, as the supply in the city currently is outweighing the demand marginally.

The retail real estate sector is seeing investment in new shopping malls in response to the consumer demand for more modern facilities. Rental rates have risen over the past year in this real estate sub-sector and with the influx of new developments coming over the next several years, we expect to see growth in this sector pick up. The retail sector has been hindered over the past few years due to a somewhat unorganised form of retail, however, we believe that this outlook of the retail sector will change over the coming years.

The industrial sector has long since been supported by the oil exports industry with high-quality storage facilities consistently in demand. With government aims to diversify the fiscal interests of the nation, we expect to see demand for more storage space as secondary manufacturing sectors are invested in by the government. Rental rates have increased over the past year in line with the other two real estate sub-sectors we cover, and we expect to see the long-term growth of this sector increase as demand for high-quality warehouse space continues to remain in demand.

The Kuwait Real Estate Report features BMI Research's market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

Key Benefits

Benchmark BMI's independent real estate industry forecasts for Kuwait to test other views - a key input for successful budgeting and strategic business planning in the Kuwaiti real estate market.

Target business opportunities and risks in Kuwait through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.

Assess the activities, strategy and market position of your competitors, partners and clients via our company profiles (inc. SWOTs, KPIs and latest activity).

Coverage

BMI Industry View

Summary of BMI’s key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Industry Forecasts Outlook

Historic data series (2010-2013) and forecasts to end-2019 for the domestic real estate industry and for the local and global finance industry.

Indicators Include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short term forecasts on minimum and maximum real estate rental prices by sub-sector (USD per square metre and local currency per square metre).

BMI’s Risk Reward Indices provide investors (real estate vendors, construction companies and financial investors) looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide an indices of highest to lowest appeal to investors, with each position explained.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.